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SMM Daily Review - 2011/7/27 Copper Market
Jul 28,2011 09:02CST
smm insight
Source:SMM
SHFE 1110 copper contract prices, the most active one, opened up RMB 560/mt at RMB 72,950/mt on Wednesday, with prices narrowly fluctuating around the daily moving average.

SHAGNHAI, Jul. 28 (SMM) –SHFE 1110 copper contract prices, the most active one, opened up RMB 560/mt at RMB 72,950/mt on Wednesday, with prices narrowly fluctuating around the daily moving average during the whole trading day. As LME copper prices climbed up and the Shanghai Composite Index returned above 2,700 points, SHFE three-month copper contract prices broke through RMB 73,000/mt in the afternoon session, reaching as high as RMB 73,050/mt briefly. However, large-scale position closings appeared later and dragged down SAHFE copper price gains. Finally, the most actively-traded copper contract prices closed at Tuesday’s level at RMB 72,810/mt, up RMB 420/mt or a gain of 0.58%. Positions for most actively-traded copper contracts were up 5,530 lots, while trading volumes were down 42,096 lots. Market sentiment was limited during the trading day, and the shorts reported profit-taking at highs. SHFE copper price movements were obviously lower than that of aluminum and zinc, but posted steadily rising momentum given strong financial property. Despite passive upward force, a strong copper market remained.

In the spot market, copper discounts continued to increase to negative RMB 420-300/mt as SHFE copper prices fluctuated after a high open in the morning business. Daily trade prices for standard-quality copper were between 71,850-71,950/mt, and RMB 71,900-72,050/mt for high-quality copper. Market supply was dominated by high-quality copper, as cargo-holders were reluctant to sell domestic standard-quality copper due to significantly high copper discounts. However, overall market supply was sufficient. Copper prices moved around RMB 72,000/mt, and trading volumes gradually contracted as downstream producers were still wary of trading at highs and traders were restricted by cash flow pressures despite increased discounts. Spot copper discounts rose further as SHFE copper prices challenged high prices in the afternoon session, with discounts for high-quality copper at negative RMB 380-350/mt and negative RMB 480-450/mt for standard-quality copper. Trading volumes were flat at morning levels, and remained weak before the month-end.  
 

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